Thursday, February 25, 2010

On factors promoting and hindering entry and exit

Posted by D. Daniel Sokol

Martin A. Carree (Maastricht University) has thoughts On factors promoting and hindering entry and exit.

ABSTRACT: Entry and exit rates can differ widely between industries, between regions, between individuals and over time. They are key features of the dynamics of industries and regions. There are various reasons for these differences. The current chapter relates entry (and exit) to entrepreneurship and discusses a range of factors that make one industry (or region) more likely to attract entrants or to have more firms exiting than others. These factors are related to incentives, barriers and the dynamic interrelationship between entry and exit. The chapter covers general patterns: it must be acknowledged of course that there is a huge difference between a small part-time retail venture opening up and a diversified entry employing hundreds of workers. The entry barriers they face are very different and so are the opportunities they exploit. Still, the chapter provides a general overview of factors behind the processes of entry and exit, at the industrial, temporal, regional and individual level.

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